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South Asia Investor Review is focused on reporting, analyzing and discussing the economy and the financial markets of countries in South Asia, including Pakistan, Bangladesh and Sri Lanka. For investors looking to invest in emerging markets beyond BRIC countries (Brazil, Russia, India and China), this blog is designed to help international investors looking to learn about investing in South Asia with focus on Pakistan. Riaz has another blog called Haq's Musings at http://www.riazhaq.com

Bhopal Victims of the Worst Industrial Accident

The year 1984 is remembered as a tragic year in India's history. Not only did the nation lose Prime Minister Indira Gandhi to the assasins' bullets, the nation also lost thousands of Sikhs in the riots that followed the political assassination, and thousands of Muslims and hundreds of Hindus in Bhopal's deadly gas leak of December 3, 1984. The Bhopal disaster is still believed to be the world's worst industrial accident that instantaneously claimed the lives of at least 2,500 people, and injured about 400,000, with the toll still rising to this day. Media reports indicate that a leak of the toxic methyl isocyanate (MIC) occurred that night when it reacted with a large volume of water that seeped into the MIC storage tanks. Detection and subsequent action by Union Carbide employees was too late to contain the leak, and forty tons of MIC flowed out of the tanks over two hours. And even if they had reacted immediately, the safety standards accepted at the plant would not have allowed them to do anything about it. Thus the MIC gas escaped into the atmosphere and drifted five miles downwind over the city of Bhopal, population 900,000, poisoning all in its path. The cause of the gas leak remains in dispute. Union Carbide says it was an act of sabotage, the malicious work of a disgruntled employee who added water to a storage tank, which caused a reaction that built up heat and pressure. However, no one has been charged.The most seriously affected areas are those nearest the plant, the absolutely poorest sector of the population, mostly Muslims. Prior to the tragedy, the city evoked the splendor of its Muslim past. It was here that princes and princesses rode elephants draped in gold. It is the home of the Taj-ul-Masjid, one of the largest mosques in the country. The "City of Lakes" lies along a sandstone ridge.

There is a continuing stalemate on the clean up of the plant site and its vicinity of hundreds of tons of toxic waste, which remains untouched. Environmentalists have warned that the toxic waste could result in contamination causing decades of slow poisoning, and diseases affecting the nervous system, liver and kidneys in humans. According to activists, there are studies showing that the rates of cancer and other ailments are high in the region. Activists have demanded that Dow clean up this toxic dump, and have pressed the government of India to demand more money from Dow.

Indian officials claim that most of the $470 million in compensation received from Union Carbide has been distributed, but there are lingering suspicions that a large part the funds have been lost to corruption. Another $40 million has been used to build the Bhopal Memorial Hospital and Research Center, which opened in 2000.

Governmemnt officials have dismissed claims that the pesticide plant at Bhopal is still leaking dangerous toxins into drinking water. However, a report published by the British-based charity the Bhopal Medical Appeal (BMA) and the Sambhavna Clinic in Bhopal says there is evidence that "there are still high levels of toxic chemicals in the drinking water supply in 15 communities near the old Union Carbide pesticide plant".

The report says the water "in and around the Union Carbide factory site in Bhopal still contains extremely unsafe levels of carbon tetrachloride and other persistent organic pollutants, solvents, nickel and other heavy metals". "Not surprisingly," the report claims, "the populations in the areas surveyed have high rates of birth defects, rapidly rising cancer rates, neurological damage, chaotic menstrual cycles and mental illness." The scientists at Indian Council of Medical Research (ICMR)have announced plans to investigate the long-term health effects of the disaster, including studies to see if the toxic gases caused genetic disorders, low birth weight, growth and development disorders, congenital malformation and biological markers of MIC/toxic gas exposure.

Many of the survivors of this tragedy still live in crowded slums near the abandoned factory walls. In addition to continuing high rates of various ailments in the surviving population and their children, the effects of the accident twenty five years ago this month have also set the city's economic development back by decades, causing widespread and long-lasting poverty well beyond the areas affected by the initial gas cloud.

The economy of the state of Madhya Pradesh, of which Bhopal is the capital, is growing at a rate of about 4% per year, much slower than the national average for India. There are more hungry people in India than anywhere else in the world, though Madhya Pradesh is the only state in the country where the level of hunger is "extremely alarming", according to the India State Hunger Index.

Six in 10 children in the state are undernourished, and more people suffer from hunger here than in Ethiopia or Sudan, according to the index, which was published in October 2008.

Dow Chemicals, which now owns Union Carbide, is facing corruption allegations in India. India's Central Bureau of Investigation raided offices of a Dow subsidiary in 2007. The raids followed allegations of bribes being paid to Indian regulatory officials to facilitate licenses for Dow pesticide products. In 2007, Dow paid a $325,000 penalty to the U.S. Securities and Exchange Commission to settle an S.E.C. investigation into those same payments.

Dow has also enlisted some strong allies here, including big corporate names like Tata and Reliance conglomerates, and some top government officials including Commerce Minister Kamal Nath.

As India, Pakistan and other developing nations vie for foreign direct investments by multi-national companies seeking to set up industries to lower their production costs and increase their profits, the lessons of Bhopal must not be forgotten. It is the responsibility of the governments of the developing countries to insist on legislating and enforcing strict environmental and safety standards to protect their people to avoid another Bhopal. Public interest groups, NGOs and environmental and labor activists must press the politicians and the bureaucrats to protect the people against the growing safety hazards stemming from increasing global footprint of large industrial conglomerates.

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I am the Founder and President of PakAlumni Worldwide, a global social network for Pakistanis, South Asians and their friends. I also served as Chairman of the NEDians Convention 2007. In addition to being a South Asia watcher, an investor, business consultant and avid follower of the world financial markets, I have more than 25 years experience in the hi-tech industry. I have been on the faculties of Rutgers University and NED Engineering University and cofounded two high-tech startups, Cautella, Inc. and DynArray Corp and managed multi-million dollar P&Ls. I am a pioneer of the PC and mobile businesses and I have held senior management positions in hardware and software development of Intel’s microprocessor product line from 8086 to Pentium processors. My experience includes senior roles in marketing, engineering and business management. I was recognized as “Person of the Year” by PC Magazine for my contribution to 80386 program. I have an MS degree in Electrical engineering from the New Jersey Institute of Technology.
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